THE TREASURY has agreed to a £50m loss over two years from next April in a bid to boost the nation’s entertainment industry and make the UK “the technology hub of Europe”.
Osborne yesterday announced the long-called-for introduction of corporation tax reliefs for the video games, animation and high-end television industries – because “we want to keep Wallace and Gromit exactly where they are,” he added.
High-profile British dramas such as Birdsong and Julian Fellowes’ Titanic were both produced overseas.
As well as keeping British productions such as Downton Abbey in the country, Osborne hopes “top international investors like Disney and HBO” will be tempted to make their premium shows in the UK.
The Treasury expects to lose £15m next year and £35m in 2014-2015 from the scheme, effective from April 2013 subject to approval from Brussels.
The government was hazy on details, but Deloitte tax partner Zubin Patel said the new credit is likely to reflect the tax reliefs given to the film industry for productions that incur at least 25 per cent of costs in the UK.
But “there has been a history of exploitation of these reliefs,” he added, warning that the government should legislate to protect the scheme.